Airbnb Offers To Collect Sales Tax For Its Transactions in Costa Rica

Shawn Sullivan, public policy lead for Central America and the Caribbean. (Airbnb)

Q COSTA RICA NEWS – The more than 6,600 hosts using Airbnb in Costa Rica may soon see the sales tax deducted from their rentals.

This was confirmed by Shawn Sullivan, public policy lead for Central America and the Caribbean, who in August met with the Deputy Minister of Revenue, Fernando Rodríguez and the General Director of Taxation, Carlos Vargas.

A report by La Nacion, says that at the August meeting the Ministerio de Hacienda (Ministry of Revenue) requested of the San Francisco based real estate rental platform, data of its hosts in Costa Rica, but the company refused. It did, however, offer to collect and remit the sales tax (currently 13%) on the rentals.

The offer is being analyzed by tax authorities so they will not refer to the matter.

According to the Dirección General de Tributación (DGT) – taxation department, this type of lodging service must pay sales and income tax.

In Costa Rica, Airbnb says it has 6,600 hosts offering 11,000 spaces, with an occupancy of 27 days per year, mostly in the provinces of Puntarenas and Guanacaste (the entire Pacific coast) and the Central Valley. Airbnb charges hosts 3% Airbnb for the use of its service.

Sullivan says it is feasible to collect the sales tax, but not the income tax because it is up to each host to file his or her tax return.

If tax authorities accept the proposal, Airbnb would charge the sales tax to its hosts and remit the tax to authorities, which would allow it to audit transactions to ensure the inclusion of the income on income tax returns.

In speaking to La Nacion, Sullivan said the August meeting with officials of the Ministry of Finance and Costa Rica Tourism Institute (ICT) was to discuss how they can work together on the subject of taxation and promote tourism in Costa Rica.

Sullivan said the August meeting was to know the position of the government on Airbnb and discuss the company’s willingness to collect and deliver taxes paid by their hosts.

“The government can have the taxes, less the personal data of our users and they can audit us whenever to ensure they are receiving what they are owed…it was an offer make things easier,” said Sullivan. “The digital privacy of our user is important. For us the Costa Rica (income) tax system, as in other countries, is a bit complicated; the easiest is to collect the sales tax or a tourism tax, but not the value added tax (VAT).”

The Airbnb director added it would take the company a couple of months to make the change to its platform and that if the company does reach an agreement with the government, prices will increase and it could mean losing business and eve some hosts to withdraw, moving to the competition. “Even so, we are willing to take the step,” said Sullivan.

The Airbnb executive stressed that the company wants to work with the governments of Latin America so they can adapt legally and can take a significant benefit from the rental market.

Airbnb is a peer-to-peer online marketplace enabling people to list or rent short-term lodging in residential properties, with the cost of such accommodation set by the property owner. The company has over 2,000,000 listings in 34,000 cities and 191 countries.Airbnb was founded in August 2008, is headquartered in San Francisco, California, and is privately owned and operated.

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